Toyota Motor Corp (TM) is the biggest auto maker in the world, but this year, Toyota stock has been in a virtual stall. TM stock has been stuck in a trading range in 2014, and investors who have owned the stock this year actually are down about 1.4%.
The negative performance of Toyota stock over the past year actually is relatively strong when compared to other big auto stocks. For example, General Motors Company (GM) shares are down some 21.2% year to date, while German auto giant Volkswagen AG (VLKAY) is down 20.6%. Rival Japanese automaker Honda Motor Co Ltd (HMC) is really in a slump, down 24.7% in 2014.
Still, there are some auto stocks that have driven higher this year. Ford Motor Company (F) shares are just slightly in the black, up 0.6% year to date. Meanwhile Nissan Motor Co Ltd (NSANY) is up nicely with a gain of 8.9% in 2014. Of course, none of these stocks can match the performance power of industry wunderkind Tesla Motors Inc (TSLA), which has seen its shares surge a remarkable 64.9% over the past ten-and-a-half months.
For Toyota, capturing a little of that Tesla stock lightning is something that it hopes it can do with its own version of an alternative fuel car. This time, however, it’s not about electricity—it’s all about hydrogen.
The high-tech Mirai will go on sale December 15 in Japan, but the company plans to make the vehicle available in limited quantities in the US and Europe by mid-2015. The Mirai will carry with it a sticker price of 6.7m yen, or approximately $57,500. That’s not cheap, but compared to a basic Tesla Model S sedan which sells for around $81,000, it’s actually quite affordable.
The Japanese word “Mirai” actually translates into English as “future,” and for Toyota, the future is fuel cells that use hydrogen to generate the electricity that will make the Mirai a vehicle capable of traveling 650 to 700 kilometers, or about 400-435 miles, on its dual-hydrogen fuel tanks. The vehicle can be refueled in five minutes or less.
Toyota has its sights set on selling some 400 Mirais in its home country, and 300 additional vehicles in other parts of the world during its first year of production. Now, compared to Toyota’s combined massive global sales of 7.6 million vehicles in just the first nine months of 2014, 700 units in the first year represent a tiny drop in an ocean of autos.
Yet for TM stock, I suspect the initial expansion into hydrogen fuel cell vehicles is something that may well ignite investor excitement about a stock that’s been basically been on cruise control for the past year.
As Elon Musk and Tesla have demonstrated, high-tech alternative fuel automobiles with a “cool factor” can translates into a whole lot of shareholder value. And though I am by no means equating TM stock with TSLA stock, a big buzz following a successful launch of the “next big thing” in alt-fuel autos could be what wakes up the sleeping giant that is Toyota stock.
Finally, Toyota already has proven via the über-successful Prius models that it can mass produce hybrid gas/electric vehicles better than any other automaker. If the Mirai is seen as becoming Toyota’s next Prius, I think we could see some strong hydrogen-fueled buying in TM stock.
As of this writing, Jim Woods was long TSLA.
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